The Fed sacrificed the foundation of middle class wealth–stable housing values–to boost bank profits.
Middle class wealth was Fed to the sharks. As the current housing bubble deflates, the investor-buyers who fueled the rally are exiting en masse: what’s the value of an asset when the bid vanishes, i.e. there’s nobody left who’s willing to pay today’s prices?
The Fed has failed to restore middle class wealth with its latest housing bubble, and the costs of the bubble’s collapse will fall not on the Fed but on those who believed the recovery was more than Fed manipulation.
The Fed sacrificed the foundation of middle class wealth–stable housing values–to boost bank profits.
1. The Ukraine turmoil and Russia and China’s coordinated Financial and Commercial Response to the threats of the West led by the US
2. Though most of the Non-Western world is backing Russia, there are 3 countries in particular that will play a key supporting role in this new ‘cold war’, and at least two of these have been strong allies of the US in recent times.
3. Jim gives his insight into what he sees happening to US treasuries and the US dollar, and the Petrodollar in the short and long term.
4. Jim forecasts a ‘Split’ dollar, a domestic dollar, let’s call it the Republic dollar, and dollars held outside the US will become ‘International’ dollars.
5. The pressures that Jim sees placed upon the Domestic dollar and it’s near instantaneous 33% devaluation
6. The coming BARTER System for settlement of international trade, reducing the US dollar to the dustbin of history.
A full 2 hours of Jim Willie at his finest are below: [Read more...]
Financial newsletter writer Dr. Jim Willie thinks 2014 will be a pivotal year for the U.S. Dr. Willie says, “We’re going to end this year with no resemblance to the beginning. We spent a lot of years trying to hold this thing together. . . . Now all the QE and bond purchases are causing some major problems, breaking major economic structures. . . It’s all breaking, it’s all breaking and they are having a tremendous problem holding it together. Now the whole Eastern World is rebelling against the dollar.”
Dr. Willie predicts gold and silver are about to move in a BIG WAY: “They are going to move it to $5,000 to $7,000 an ounce, and silver $200 to $400 per ounce. Because all the world’s central banks are going to need gold they are going to sell Treasury bonds to buy gold to make for a solution to their banking systems. What’s the solution? It’s legitimate reserves, hard asset gold reserves.”
In closing Dr. Willie predicts, “I think you are going to see by the end of this year that the dollar is mortally wounded and Treasury bond regarded as toxic paper.”
Join Greg Hunter as he goes One-on-One with Dr. Jim Willie, Editor of “The Hat Trick Letter” which can be found on GoldenJackass.com. [Read more...]
The birth of the Eurasian Trade Zone is nigh.
The Gold Standard will return, not in bank transfer platforms or currency trading platforms, but in peer-to-peer transactions made in settlement. The world demands a new payment system, an alternative to the deeply flawed USD-centric current system. Even effective viable barter systems are to emerge. It is coming. It will shake the world.
There are certain facts that are difficult to face in the world. One is that the currency you have spent you life working for isn’t worth what you thought it was. In reality, it may not even be worth the paper that it’s printed on. The United States paper currency has been very slowly devalued for over a century now. This was accelerated into high gear on August 15, 1971 when Nixon took the United States off the gold standard. By removing the gold backing (value) from the United States currency, it opened the door to the unfettered money printing that we have today.
This Is What Stealth Inflation Looks Like.
Stealth inflation is how the authorities hide the devaluation of the dollar in plain sight. Do you think political decisions at the county, state and federal levels would be shown in a different light if your food bill had been VISIBLY raising by 20% to 30% per year for consecutive years?
The images in this article tell the difficult truth for all to see, and the numbers don’t lie.
A man goes into a bank, prior to 1933, and hands over a $100 US Treasury Note, or even a Federal Reserve Note, which also was specie-backed, at the time, and asks for $50 in gold and $50 in silver. No problem.
Sometime after 1933, a man goes into a bank with a $100 Federal Reserve Note and asks for $50 in gold and $50 in silver.
Banker: “Sorry, sir. There is no gold or silver backing for your $100. Would you like two $50 Federal Reserve Notes, instead?”
When the Federal Reserve Act was passed, two days before Christmas in 1913, when most politicians were home on holiday, the Act was passed with no opposition by the remaining chosen politicians who stayed on, and were well paid to do so by the Rothschild-backed bankers. And so the most treasonous act against the Constitution was passed.
Here is how the rest of the plan was carried out:
Financial expert and best-selling author, James Rickards, thinks the “international monetary system is headed for a collapse.” . Fast forward to today. When the next collapse comes, it is going to be bigger than the last one. It’s going to be exponentially bigger. The five biggest banks were too big to fail in 2008, today they are bigger. They own a larger percentage of the total banking assets. . . . When you double or triple the scale of the system, you don’t double or triple the risk. You increase the risk by an exponent that could be 10 times or 100 times greater.”
On the Fed engineering another 2008 type bailout, Rickards claims, “The last crisis was barely enough for the Fed to contain. They have used up all their dry powder. They can’t take the balance sheet any higher. They are already insolvent. . . . The game is up.”
Rickards foresees big inflation because the U.S. dollar’s buying power will shrink. Rickards predicts, “Imagine gas at $20 a gallon and bread at $10. That’s what we’re talking about.” So, if big inflation is coming, what about gold? Rickards says, “When I say the price of gold is going to $7,000 or $9,000 per ounce, which I expect it will, what I am really saying is the dollar is going to collapse 80% or 90% or more.” It did in the 1970’s. None of this is unprecedented. It all happened before.” [Read more...]
In the past week, there was an increase to $104.5 billion in Treasury sales from foreign sources, [wonder who could be selling?], when the average weekly weekly sales are $46.6 billion. Someone is sending a very strong message to the US that undermines the fiat “dollar.” In the
larger scheme of things, this is a real shot across the bow, and more of this kind of action will be taking place in the future.
There are battles being waged deep behind the scenes, not being made public, but visible based on developing world affairs, if one wants to connect dots without concrete proof. Ukraine is the latest prime example. The Western central banks are attacking Russia in desperation to protect failing energy sources and survival of the even faster failing Federal Reserve Note, more commonly accepted by a different name, the “dollar.”
The biggest factor driving gold prices at the moment is the increasing tension between the West and Russia over Ukraine. The EU agreed on a framework yesterday for its first sanctions on Russia since the Cold War.
This is a much stronger response to the Ukraine crisis than many expected and a mark of solidarity with Washington. Senior American military officials have been making hawkish sounds and warned that they are ready for a military response to Russia.
Russian government officials and businessmen are bracing for sanctions resembling those applied to Iran according to Bloomberg. Should Russian foreign exchange reserves and bank assets be frozen as is being suggested, then Russia would likely respond by wholesale dumping of their dollar reserves and bonds.
In retaliation, Russia could opt to only accept gold bullion for payment for their gas, oil and other commodity exports. This would likely lead to a sharp fall in the dollar and a surge in gold prices.
Currency wars could soon take the turn for the worst that many of us have warned of for some years.
In this excellent interview with Jim Goddard, David Smith, senior analyst for The Morgan Report discusses the economic collapse of Argentina, and warns investors that what they are witnessing in the South American country is coming to the US.
Smith has recently spent several weeks in Argentia and witnessed the ravages of currency devaluation firsthand as Argentina devalued the Peso once again against the dollar.
Smith states that the inflation induced hoarding is intensifying in Argentina, and that while the US dollar has been strengthening recently vs. other fiat currencies, an Argentina-like fiat collapse is coming to the US in the next few years.
David Smith’s full interview on his first-hand experience of the Argentinian Peso collapse is below:
Chinese FX reserves expressed in US dollars have a total value of or $3.8 trillion at the end of December. At least 34 % of these assets are denominated in US dollars in the form of US treasuries ($1.3 trillion). Only 1 % is held in physical gold according to the PBOC; 33.89 million ounces (1054 tons), worth $41.5 billion in December.
China is in the top ten in terms of gold holdings, but only holds a fraction of gold relative to its total FX reserves.
The bulk of China’s FX reserves are extremely vulnerable for a devaluation of the US dollar. At the same time a devaluation of the US dollar is imminent, as Yu Yongding, a prominent Chinese economist and former member of the monetary policy committee of the People’s Bank of China, has expressed in numerous presentations. This is why China has a strong incentive to hedge against the USD by increasing their official gold holdings.
The big problem for China has been buying large quantities of physical gold without increasing the price. For this reason China’s strategy has always been to be as secretive as possible about its gold purchases. They don’t disclose their gold import numbers, nor any interim changes in official gold holdings. They hide their dire hunger for the yellow metal to simply bargain a better price. But sometimes their craving to buy gold (without affecting the market) slips through the media:
By December, the most recent month for which statistics are available, the US dollar Fiat Money Quantity (FMQ) had grown to $12.48 trillion.
This is $5.05 trillion more than if it had grown in line with the established average monthly growth rate from 1960 to the month before the Lehman Crisis.
By this measure of currency inflation, since August 2009 inflation is now 68% above trend. [Read more...]
The office building of JPMorgan with its largest private gold vaults at Chase Manhattan Plaza, opposite to the New York Federal Reserve building, has been recently sold to the Chinese.
This indicates the US and China seem to be working together in advance towards a global currency reset whereby the US, Europe and China will back the SDR’s with their gold reserves so the dollar can be replaced.
We have now arrived at the point where it is not the banks, but the countries themselves that are getting in serious financial trouble. The idea that we can ‘grow our way back’ out of debt is naive. The current solution to ‘park’ debts on to the balance sheets of central banks is just an interim solution.
A global debt restructuring will be needed. This will include a new global reserve system to replace the current failing dollar system, probably before 2020. [Read more...]
Financial newsletter writer, Dr. Jim Willie, has a bleak warning for America. Willie says, “I don’t think the United States is going to be killed as the host. I think it’s going to be bled to death and harvested for its organs, and done so by China.” Dr. Willie explains, “The Chinese will drain this nation and all the Western nations of all their gold.” Dr. Willie predicts, “I have been saying steadily, not until the dollar has problems and the globe starts saying we’re not going to use it anymore, and we’re going to force a devaluation on you . . . that is when the dollar will hit Main Street and the U.S. economy with price inflation. It’s coming this year. . . .This is the late stage, the very late stage.” Dr. Willie goes on to predict a big German bank will “cause a string of bank failures, a domino effect of failed banks.” Dr. Willie goes on to say, “When the big impact comes from the dollar global rejection, and when devaluation does take place, there will be three effects: a jump in prices . . . food shortages and supply disruptions, the third is violence. This is the year we have the currency explosion.” Don’t think Obama Care is going to make things easier. Dr. Willie thinks, “It will be 100 times the nightmare than you think it might be. . . . Obama Care is a big plan to track people, both their money and their bodies, like a bunch of herded animals. This is going to manage death of the individual and manage death of the economy.” Join Greg Hunter as he goes One-on-One with The Golden Jackass, Dr. Jim Willie: [Read more...]
Maturing and Nascent Trends and New Developments should increase Social and Economic Turmoil and Greatly Increase Volatility in the Markets in 2014. Result: Mega Moves in Key Markets, the Most Salient of which we outline here.
These Mega Moves will create Great Opportunities for Profit for the Nimble and well-informed, and Great Losses for the Purblind or those in Denial of Economic and Financial Realities.
A Currency Devaluation War is quietly underway and it will end very badly for the Economy and the Markets.
A Major Consequence is that as the $US (and other Major Fiat Currencies) Tanks, we expect it will be reflected Mainly in appreciation of the Price of Tangible Assets e.g. Crude Oil (we are already seeing this) and Gold and Silver. [Read more...]